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It’s possible that the American recession is already here

Yes, yes, I know:

When it comes to the economy, in fact, Biden is in trouble. The 46th president pledged more than $1 trillion on the Inflation Reduction Act (which at the time was estimated to boost inflation slightly) at a time when it was clear far too much money had already been pumped into the economy – all in a crude attempt to secure some political leverage.

Instead, he is forced to grapple with abysmal polling, which illustrates just how disappointed Americans are with the economy’s performance.

Polling from Gallup this autumn finds that only 20pc of Americans consider the country’s economic conditions to be “good”, compared to 60pc who consider those conditions to be either “only fair” or “poor”.

Meanwhile, the vast majority of respondents fear the outlook for the economy is moving in the wrong direction, with 73pc reporting that they believe these conditions are getting worse, while only 24pc think they are improving.

This kind of doom and gloom perspective of American voters compares, Gallup says, to attitudes more than a decade ago, during the time of the financial crash.

It’s a fairly standard observation that we never really do know we’re in recession until it’s almost over. That’s slightly a joke, but only slightly.

Looking at the profit reports of American companies there’s an awful lot of “consumer demand is weak” and “sales difficult to complete” and stuff. The renewables supply chain is destocking like billy-oh. Fortunately I’m not a macroeconomist and so don;t have to actually argue this in detail. But I’ve a suspicion that the US economy actually is in recession right now.

Which makes Biden toast this time next year of course. But, obvs, we’ll see.

11 thoughts on “It’s possible that the American recession is already here”

  1. I’ve always loved Biden’s idea that printing a trillion dollars would reduce inflation

    Does Spud have a new grift…

  2. Hardly surprising, given that interest rates were raised from 0.25% to 5.25% over just 16 months.

    So the only question is, what will the Fed do next? Will it be a Greenspan Put or a Volcker Shock?

  3. Which makes Biden toast this time next year of course.

    Rilly? Depends on who’s counting the votes, no?

    I don’t think the Big Guy is in any danger from the electorate. He hid in his basement in the 2016 election, only emerging to huff a child or say something bafflingly demented. Landslide victory, if you can believe it (and to not believe it means you’re a dangerous extremist the FBI and IRS want to talk to).

    It’s the selectorate he needs to worry about, they would like a more plausible figurehead for the forthcoming war with China. Somebody who doesn’t drool in public or smell like Willie Brown’s brown willie.

    Gavin Newsom would be perfect, he stepped right off the page of a Bret Easton Ellis novel and combines the dead-eyed sociopathy of Justin Trudeau with the Big Donor appeal of a less damaged Hillary C.

  4. How can an empty husk become toast?

    Anyhoo, is there a clincher e.g. Herr Professor Krugman saying that a recession is unlikely?

  5. Herr Professor Krugman saying that a recession is unlikely?

    How much high strength yarmulke tape was he wearing at the time?

  6. Political writers are continually baffled by Biden’s declining poll numbers when they claim the economy is doing so well. The US is big. Some states are doing well and some (often under Democratic governance) are not. Texas, and a few other states that do their best to ignore the Democrats, pull up the averages. Yet they say, Biden did that and are then baffled by people in states that aren’t doing so well aren’t convinced.

    The recession, when it comes or if it is here already, will be felt differently in different parts of the country, perhaps very differently.

  7. Bloke in the Fourth Reich

    How anyone thinks we haven’t been in the mother of all recessions since 2020 I do not know.

    How anyone thinks the last 22 years of interest rate and state borrowing policy means it isn’t going to turn into an even bigger mother I also don’t know.

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